THE Bangko Sentral ng Pilipinas has given the planned P20-billion long-term negotiable certificates of time deposits (LTNCDs) of Philippine National Bank (PNB), an issuance that is envisioned to manage the lender’s debt profile.
“We received today, November 28, 2016, a copy of the Bangko Sentral ng Pilipinas (BSP) approval of the bank’s request for authority to issue LTNCDs in the aggregate amount of up to P20 billion,” PNB said in a disclosure to the Philippine Stock Exchange on Monday.
In a separate disclosure on July 22, the bank said it plans to issue LTNCDs in one or more tranches “to extend the maturity profile of the bank’s liabilities as part of overall liability management and raise long-term-funds for general corporate purposes.”
LTNCDs are time deposits that have longer maturity and are higher yielding than regular deposits. The debt instrument is negotiable and insured with the Philippine Deposit Insurance Corp. up to a maximum coverage which is currently at P500,000.00 per depositor.
Local banks are raising more funds to comply with the stricter capital requirements of the Basel 3 regime and to gear up for heightened competition with the entry of international lenders in the country since the government liberalized the banking industry.
Other than PNB, listed China Banking Corp., Metropolitan Bank and Trust Company, and Philippine Savings Bank are also raising fresh funds via LTNCDs to take advantage of low interest rates before the US Federal Reserve raises interest rates in December – which could impact on global yield rates and borrowing costs.
Incorporated in 1916, PNB is engaged in commercial banking with a total network of 665 domestic branches, 75 overseas branches and 937 automated teller machines (ATM) as of end-2015. The bank has an extensive international footprint across Asia, Europe, the Middle East and North America.